China, U.S. declare 90-day halt to new tariffs: White House

BUENOS AIRES (Reuters) - China and the United States agreed to halt additional tariffs in a deal that keeps their trade war from escalating as the two sides try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days.

U.S. President Donald Trump, U.S. President Donald Trump's national security adviser John Bolton, U.S. Treasury Secretary Steven Mnuchin attend a working dinner with Chinese President Xi Jinping after the G20 leaders summit in Buenos Aires, Argentina December 1, 2018. REUTERS/Kevin Lamarque

The White House said on Saturday that President Donald Trump told Chinese President Xi Jinping during high-stakes talks in Argentina that he would not boost tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1 as previously announced.

Beijing for its part agreed to buy an unspecified but “very substantial” amount of agricultural, energy, industrial and other products, the White House said in a statement.

The two sides would also launch new trade talks to address issues including technology transfer, intellectual property, non-tariff barriers, cyber theft and agriculture, it said.

If no deal is reached within 90 days, both parties agreed that the 10 percent tariffs will be raised to 25 percent, the White House said.

On Sunday, China’s state-run media lauded the “important consensus” reached by the two leaders but did not mention the 90-day deadline.

Trump imposed 10 percent tariffs on $200 billion worth of Chinese goods in September. China responded with its own tariffs.

Trump has also threatened to put tariffs on another $267 billion worth of Chinese imports, as the relationship appeared set to worsen in the weeks ahead of the Argentina meeting.

“I think this is not a breakthrough - it’s more of avoiding a breakdown. This is not a worst case outcome but the hard work is ahead of them,” said Paul Haenle, Director at the Carnegie–Tsinghua Center in Beijing.

“The Chinese have to come into (the talks) with a sense of urgency,” he added.

‘INCREDIBLE DEAL’

As part of the deal, China agreed to start purchasing agricultural products from U.S. farmers immediately, the White House said.

Speaking to reporters on Air Force One, Trump hailed his agreement with Xi.

“It’s an incredible deal,” Trump said. “What I’d be doing is holding back on tariffs. China will be opening up. China will be getting rid of tariffs.”

He said under the deal China would buy a “tremendous amount of agricultural and other product” from the United States. “It’ll have an incredibly positive impact on farming.”

State Councillor Wang Yi, the Chinese government’s top diplomat, told reporters in Buenos Aires that the two sides believed the agreement “effectively prevented the expansion of economic frictions between the two countries”.

“Facts show that joint interests between China and the United States are greater than the disputes, and the need for cooperation is greater than frictions,” he said.

U.S. companies and consumers are bearing part of the cost of the U.S. tariffs on China by paying higher prices for goods, and many companies have increased prices of imported goods.

At the same time, U.S. farmers have been hurt by reduced Chinese imports of soybeans and other products.

China “is open to approving the previously unapproved” deal for U.S. company Qualcomm Inc (QCOM.O) to acquire Netherlands-based NXP Semiconductors (NXPI.O) “should it again be presented,” the White House statement said.